2000 (11) TMI 888 - AT - Central Excise

Summary

Issues:
1. Duty demand on alleged clandestine manufacture and removal of final products.
2. Imposition of personal penalty under Section 11AB and Section 11AC.
3. Benefit of Modvat credit on duty paid inputs.
4. Quantum of personal penalty and imposition on partner under Rule 209A.

Detailed Analysis:
1. The case involved the appellants engaged in manufacturing Printed and Plain Aluminium Foils and PVC Film used as packing materials for pharmaceutical products. Central Excise Officers found a shortage of Aluminium Foil during a visit, leading to a demand of duty amounting to Rs. 2,84,088.00 based on allegations of clandestine manufacture and removal of final products. The Joint Commissioner confirmed the duty demand and imposed a penalty, while the Commissioner (Appeals) remanded the matter for deciding the penalty quantum afresh, leading to an appeal before the Tribunal.

2. The Commissioner (Appeals) confirmed the duty demand but agreed with the appellants that penalties under Section 11AC and Section 11AB could not be imposed for the relevant period. The Commissioner remanded the penalty decision to the original authority and directed consideration of penalty under Rule 209A on a partner. The Tribunal assessed the duty demand, considering the appellants' submissions and evidence, confirming a reduced duty amount of Rs. 1,06,586.38.

3. The appellants argued for the benefit of Modvat credit on inputs used in manufacturing the final product subject to duty demand. The Tribunal agreed that the Modvat credit of Rs. 40,000.00 should be adjusted against the confirmed duty demand of Rs. 1,06,586.38, with the appellants required to pay the balance amount.

4. Regarding personal penalties, the Tribunal held that a penalty of Rs. 20,000.00 was justified considering the circumstances and reduction of duty. The Tribunal disagreed with the Commissioner (Appeals) on directing imposition of a penalty on a partner under Rule 209A, as no penalty was initially imposed, and there was no appeal by the Revenue. The Tribunal set aside this direction.

In conclusion, the Tribunal confirmed a reduced duty demand, adjusted the Modvat credit, imposed a penalty on the appellants, and set aside the direction for a penalty on the partner. The appeal and Stay Petition were disposed of accordingly.